84 acre plot

Bordering Wentlooge business park on the eastern edge of Cardiff, there is 84 acres of land for sale, with a guide price of £500,000. It appears to have been on the market since 2014. Jonathan Hughes and Holly Tomlinson have been exploring the possibility of raising finance to purchase this land and establish a community owned market garden. It has the feel of a piece of land that has been abused by industrial farming, though with a couple of years of ecological management we expect it would come back to life and make a highly productive horticultural holding.

Initial enquires with Triodos revealed that we would not be likely to get a farm business loan without a significantly larger deposit that we currently have. We received some positive responses to our outline business plan (bellow) regarding the prospect of securing shareholder investment from wealthy philanthropists. We would anticipate this capital being used as a kind of bridging loan, to secure the land and allow us to start producing crops, after which we would run a community share offer.

As this is bare land, and it is located in a green wedge development zone administered by Newport Council, one of the most significant risks to this venture would be planning permission for the building that would be required in order to function as a diversified market garden. To mitigate this risk, we paid a significant amount of money for pre-planning advice from Newport Council for a, roughly, 10,000m2 building, that would combine a cold storage warehouse, semi-automated wash and pack facility, mechanical workshop, equipment storage, staff canteen, office and toilet. Here is the response we got.

Summary
Our goal is to build an institution to facilitate the development of a local sustainable food industry in Southeast Wales. The first step, and foundation for this institution will be a large peri urban market garden to demonstrate that ecologically regenerative, carbon negative, labour efficient, productive and profitable farming of nutrient dense, delicious food is possible. We need to raise between £580,000 and £650,000. £500,000 will be used to purchase 84 acres of the wentlooge levels, on the edge of Cardiff. The rest of the money will be the start up capital for a veg box business. We aim to turnover almost a million pounds in our first year, and do so with a small profit. Within 5 years we expect to have invested almost a million pounds in infrastructure and equipment, and we expect our turnover to be roughly three million pounds a year, with approximately one million paying labour, one million in other expenses, and one million pounds a year as profits that will be invested back into the local food industry.

Organic market gardening is notorious for producing businesses that are extremely labour intensive and not highly profitable. Why, then, do we think these financial goals are achievable? There are several factors that have a dramatic impact on the profitability of a market garden.

Scale. The principle advantage of the size of this business is that it will allow us to invest in the infrastructure and equipment that will make our production processes labor efficient. Proximity to the market. The site is between 10 minutes and an hours cycle ride from the residential areas of cardiff. As a location for a farm shop, and a place from which to run a delivery service, it is fantastic.

Customer community ownership. Having a large community of local shareholders will give us a huge amount of goodwill and support to help us be successful. Vertical integration. We are going to work towards being a company that produces the inputs, and equipment, as well as growing the produce and running the sales and distribution system for our products. Pragmatism. Despite our commitment to core values, we are not a lifestyle project and are not ideological. This will enable us to invest resources on the basis of pragmatic compromises based on carbon calculations, nutritional quality, ecological impact and business growth.

The Land
This is the property we are looking at: https://www.djandp.co.uk/media-files/brochures/4871049_DOC_00.pdf

The gwent levels was intertidal marsh land before it was reclaimed from the sea by Romans nearly 2000 years ago. Since then it has been used for a diverse range of agricultural purposes, grazing, arable, horticulture, and even top fruit. For some reason this land is classified on the welsh government's predictive agricultural land grade map as grade 4. The land does not have the indicator plants of poor drainage, such as rushes. I was unable to find evidence of gleying in the topsoil, and it has been cultivated regularly. The water table is often high, but it is free draining. As we would like to develop a horticultural system involving specialist lightweight electrical equipment, minimum shallow cultivation and quite a bit of manual labour, we don't expect to have any trouble with wetness. On Natural Resource Wales flood risk map, there is no indication of a risk of flooding from the river, and a low risk of flooding from the sea (on a scale of low, medium or high). Though this land is, of course, at some long term risk from sea level rise, if the welsh government chooses to stop investing in the sea defences that protect this land, they are also giving up on half of Cardiff and Newport. In response to our enquiry Natural Resources Wales told us that their policy is to maintain the Wentlooge sea defence against sea level rise for the foreseeable future, by which they mean at least a hundred years. For these reasons, we feel that it is a reasonable investment, and that this concern is worth the risk, given the proximity of this land to the urban population, its horticultural potential, and many other advantages.

Planning Permission

This land, though it abuts Cardiff’s built up area, is within Newports administrative area. This is likely to complicate our planning process, as the political incentive of the benefits to Cardiff may not count for much. Also, the land is being sold with a 50% development clawback.

However, our planning requirements are extremely modest for the size of the property. In order for our business plan to work, it is essential that we have a large agricultural building that is suitable for handling vegetables. This means it will have to meet the requirements of a workplace, which includes toilet facilities and a canteen area. This facility is essential to our proposed venture, though this is all we absolutely need. It is not clear to us whether this facility would be a permitted development right or not.

If we are unable to get the legal right to some kind of temporary (or permanent) dwelling, we may at least need to accommodate a security guard. It would also be desirable, though not essential, to be allowed to have a significant area of polytunnels or glass houses.

We may negotiate to have agricultural planning permissions specifically excluded from the development clawback. If we are unsuccessful in this, we will include the development clawback payments in our business plan.

Some Business Goals

 * 1) Net Carbon Sequestration.
 * 2) Ecological Land Management.
 * 3) Living wage for all our workforce.
 * 4) Consumer community ownership.
 * 5) Affordable, nutrient-dense food.
 * 6) Open source, appropriate technological development.
 * 7) Providing connection to the land to the urban community.
 * 8) Training the next generation of young farmers.

Decision Making and Accountability
We anticipate registering as a community benefit society, with a board of directors to be elected by some combination of the workers, and the shareholder and customer community. We are seeking advice on the best legal arrangement for our goals.

We are looking for significant engagement and ownership from the urban community of Cardiff, and for that reason, we are looking into systems of democratic community engagement in business management and oversight. We also want to develop aspects of a workers co-operative within our organisation. We will have a flat pay structure policy, and seek to develop systems of worker ownership and control of the business over time. However, hierarchy of management and accountability can be important for the success of a business, particularly in the early stages of development. For this reason, we would say that we are interested in exploring and developing anti-hierarchical processes in a growing team over time, though we are not ideologically opposed to having legitimate, accountable hierarchies within our organisation.

Marketing Strategy
On an ongoing basis, we hope to have a large community farm, for recreational horticulture and professional care farming work. This will be a core part of how we meet our goals, build community and develop customer loyalty.

As an initial step to building a multistakeholder support community, we are running an open survey to build a contacts database. This is both our market research, and the beginning of our marketing and community share offer campaign. The aggregate results of this survey are in the spreadsheet that accompanies this document, and a link to the survey and that document are in the appendix below. As well as developing our social media presence and distributing fliers, we intend to host a series of public talks to promote this project, field questions and build the community. All these marketing activities will be directing people towards the online survey, so that we build up our community contacts database.

Infrastructure
Once we have either notified the council of our intention to build, or secured planning permission for our building, the first order of business will be to get mains water, sewage, electricity and data connections installed. There is an 11kv power line in the road immediately in front of the property. Given the proximity to the city, our current assumption is that sewage, mains water and internet connections will be reasonably affordable. We are budgeting £20,000 for these service connections.

Given that we are likely to want to have a number of electric vehicles, significant electrical equipment and renewable generation capacity, if it is reasonably economical to do so we may choose to install a 3 phase power connection at this point. If we find this is prohibitively expensive then we can achieve significant business development on a low voltage single phase connection. Next we will erect our building. The immediate design consideration for this building will be packing 3000 veg boxes a week. As well as the aforementioned works toilet, we will want to have vehicle loading and unloading bays, and a large open space for handling pallets, unloading into portioning machines and running crates down roller conveyors as they are packed. As we produce our own crops, we will increasingly want to have crop washing equipment, floor drainage and water and power coming down from the ceiling. During the first phase of this business our cold storage requirement will be quite minimal as we will be buying produce as we need it. The layout of the building should consider the future need to either install or build significant cold storage facilities, with a layout that is conducive to efficient handling and potential for upscaling.

The most economical way to construct this building will be to purchase a second hand agricultural or industrial shed of an appropriate size. For this reason, the exact layout of this building will be designed once we have purchased the building. We are budgeting £20,000 for this building, including equipment hire and materials for a yard, but excluding labour. Operational Development Strategy

We will start by investing everything in an efficient box packing and distribution system, with the goal of building up to 3000 box customers spending an average of £15 a week as quickly as possible. 3000 boxes is 40 boxes per acre over 75 acres. This would allow us to produce about 80% of the annual content of the box with space for cover cropping and green manure leys in the rotation. During our first development phase, we will be buying organic vegetables in bulk, and distributing them to our customers. Each subsequent development phase will involve investing in the infrastructure and equipment to produce some portion of the box. We will start with the highest value crops that require the least capital investment to produce efficiently at the appropriate scale. We will then reinvest the profits from each diversification into the capital costs of the next phase. In practice, this will mean starting with outdoor leaf vegetables, then progressing towards things like polytunnels and cold storage facilities over time. Our theory is that if we were to start small but diverse, every operation would be undercapitalised, labour inefficient and unprofitable. This lack of profitability would make growth challenging and slow. If, instead of trying to grow into scale from diversity, we start with a narrow focus on the most profitable aspects of our business goals, then grow into diversity at scale, we will generate the profits to enable us to afford the capital investments needed to make each stage labour efficient.

Phase 1. Box pack.
Our estimate is that, for 3000 boxes we will be handling about 10 tons of vegetables a week (about 3.3kg/box) though not all of these vegetables will need refrigeration. We will seek to buy 2 to 3 large refrigerated vans for £3,000 to £7,000k each. Ideally, these will be the same make of van, which will aid in maintenance and repair as we can accumulate a stock of spare parts and learn their common faults. Most likely they will be Mercedes Sprinters, though they could also be Iveco Dailys. These vans will not only be our delivery fleet, but will also allow us to drive to wholesale distribution centers or organic farms to purchase vegetables if necessary, and provide us with our initial cold storage capacity. A portioning machine, stainless steel tables, roller conveyors, pallet trucks and miscellaneous small items will add up to another £10,000. If we buy used reusable plastic boxes, these will cost £2 each, and each customer will probably need 2, so we are looking at £12,000 for 3000 customers. We will not start with 3000 customers on day one, so this cost will be incremental. Depending on the time of year we are able to start this project, we may urgently want to pay an agricultural contractor to cultivate and seed a legume rich cover crop over the entire 84 acres of land, for which we should allow about £5,000.

On top of the £40,000 for initial infrastructure outlined above, we want to allow £30,000 to have the capital to get this initial box packing operation off the ground. We will aim to start with at least 500 customers, and grow by at least 250 customers a month. If the average price of a box is £15/week, we would turnover £7,500/week in the first month, and be up to our 3000 boxes at £45,000/week within a year. We expect to start with a team of 10 full-time employees (FTEs) on £400/week, giving a total staff cost of £4,000/week. Our markup on the wholesale price of veg will average about 1.5, so we can assume that we will be spending less than 10k/week on produce. As our customer base grows, the team will learn to work faster and we will refine our systems and work out any inefficiencies. For this reason, we expect to be able to triple the number of boxes we deliver with only a 50% increase in staff. Diesel, consumable packaging materials, transaction fees and other miscellaneous costs, in addition to our £4,000/week wage bill (increasing to £6,000/week over the year) mean that under these assumptions we should break even by the end of our first quarter, and make a profit in our first year. See the financial projections in the accompanying spreadsheet for more detail.

We have tried to be conservative in these estimates. We feel that 15 FTEs is generous for the amount of work involved in this operation, and we may not take £400/week wages at this stage in the business. We will have a flat pay structure and work towards aspects of a workers co-op.

We will try to involve the customer and shareholder community in the business to make the operation as efficient as possible. For example, as well as collecting boxes from the farm, customers will be able to host collection points for friends and neighbors. For customers who either cant or dont want to engage with this attempt to streamline our distribution system, we will charge a home delivery fee on top of the price of the box.

Phase 2. Primary Crops
Once we have established our sales system, customer community and core staff, developed a cash reserve and have a stable profit margin; we will be ready to start investing in crop production. The first crops we will produce will be direct seeded leaf vegetables in deep compost mulch. We will establish permanent compost mulched beds with woodchip pathways with a compact tractor, into which we will direct seed crops with a manual, multi row seeder. We will harvest with an electric, walk-behind leaf harvester, loading crops into bulk containers that the compact tractor will take back to the packing shed. There, they will be washed in a flume washer, and packed for the box. We may seek standardised reusable boxes to pack these in for our box customers, in which case we may want a pass through washing machine to keep these boxes hygienic.

Including soil testing, amendments, compost, woodchip, a compact tractor, a flail mower, power harrow, bed ridger, rear discharge spreader, front end loader, initial seeds, the seed drill, irrigator, pump, harvester, bulk crates, flume washer, and the packaging, this diversification will require a capital investment of around £50,000.

After we have this equipment, it will be relatively easy to start producing outdoor transplant crops, such as celery, celeriac, courgette, broccoli, cauliflower, cabbage, and the like. We already own a compost blocking and seeding machine. In addition we would need a transplanter, inter row cultivator, some hand hoes, harvesting knives, and we would be ready to go. This might add up to £10,000 to the capital cost of phase 2. An additional £5,000 will get us a decent size polytunnel that can be used to raise more and earlier transplants. All of this equipment should ultimately allow us to produce about 50% of the content of the box. We would expect to exceed 20 fte by the time we are producing all this veg, but our profit margin should be considerably higher, as will the quality of our product.

Note
We are considering two options. From a logistical point of view, it would be easier to launch the box as a 100% bought in vegetable operation, and run this business until we have developed sufficient cash reserves to invest in crop production. This would be about a £70,000 startup (excluding the price of the land) in this analysis. However, if we are not extremely effective with our customer communications there may be a danger that we get a reputation as a fake local veg box from this initial phase of our development. From an image point of view, it may be a better strategy, therefore, to try to launch at least the salad production operation simultaneously with the box pack and delivery business, so that we are growing at least some of our vegetables from day one. It is this consideration that leads us to say we are seeking to raise between £580,000 and £650,000. In practice, this decision may be determined by how soon we acquire the land, planning permission and get services installed. If we are able to get a packing shed and yard in the late autumn, we should start buying and selling veg, but will not be establishing crops until the land dries up the following spring, where as if we find ourselves starting in the spring, we may try to develop both these aspects of our business simultaneously.

Phase 3. Secondary Crops
There are four infrastructure investments that will enable a further diversification of this business. It is not clear yet whether the next priority will be in some kind of plant nursery, or in some kind of composting facility. This decision will depend on our experience of the fertility of the land, locally available organic amendments, and the input from the wider community. Plant Nursery A plant nursery can have low construction costs but high running costs, or could require more capital but be more energy efficient, and therefore both cheaper to run and better for the environment. An example of a way to do this with low capital costs would be to erect a polytunnel and use a propane heater to keep it warm in the cold nights of early spring. The higher capital cost, but lower running costs and more carbon efficient way would be to have an insulated building and artificial light. This can be much more energy efficient, not only because the space can be much better insulated, but also because the grow lights can be on shelving, allowing you to stack several layers of plants and fit many more into a smaller space.

Wormery
Another infrastructure development that will be competing with the plant nursery setup for priority will be some kind of composting operation. Given that municipal green waste compost is already produced on an industrial scale locally, and is available very cheaply, it would be logical for us to develop a system that took this as a feedstock and improved its quality. We may wish to blend it with other materials such as manure to change its C:N ratio, or get other chemistry in there with rock dust, seaweed or other organic amendments (depending on our soil chemistry and the chemistry of the municipal green waste compost). Perhaps the most appropriate system for enhancing this feedstock would be a continuous flowthrough worm bin system, such that our primary soil amendment becomes worm castings.

Polytunnels
To produce tomatoes, aubergines, peppers, cucumbers, french beans, and basil for 3000 boxes we will need around 6000m2 of polytunnel. Including the drip irrigation, horizontal airflow fans, and the like, this will cost around £150,000. Another consideration is that the water available from the reens on this land is likely to be somewhat brackish. Though this should not be too much of a problem for seasonal irrigation of outdoor crops, if it is the only source of irrigation for a piece of land that is completely protected from rainwater, this brackish water may result in a problematic accumulation of salts in the soil of the polytunnels. One solution to this problem would be to engineer the tunnels to be movable. This also has a significant productivity advantage, as it would allow us to establish winter salad crops before removing the summer crops, then move the tunnels over those crops in the autumn.

Cold Storage
From the classic storage crops, such as carrots, onions, squash, etc, to many other crops that can be stored, such as cabbages or heritage tomatoes bred for their storage characteristics, there is significant potential to increase the proportion of the box we produce on-farm by investing in our storage infrastructure. This infrastructure isn’t cheap, and the value of these crops is not particularly high. However, they will add diversity to our rotation, be more carbon efficient to produce and sell locally, and as we can monitor the nutrient density of our produce, improve the overall quality of our box. For this reason, though large scale, long term cold storage is likely to be one of the last infrastructure developments we will make, it is an important part of achieving our business goals.

Summary
By the time we have all of the above infrastructure, we will have spent an additional £300,000 to £500,000. However, we will be growing 75% of the contents of 3,000 boxes, which at an average value of £15/week, would yield a turnover of £2,340,000. By our estimate, this will still leave significant space in the rotation for some high value crops to be produced for sale to restaurants, etc. On top of this, we expect to be producing plants and worm castings for gardeners and growers. This is how we arrive at our target of an annual turnover of £3,000,000 a year, ⅓ on wages, ⅓ on running costs, and ⅓ available to be reinvested. We hope to be at this stage within 5 years.

Training
By the time we are producing 75% of the annual contents of 3,000 vegetable boxes, we will need a team of 30 to 50 full time workers. Developing this team will involve a significant amount of training new entrants in horticultural skills. An obvious and valuable way to capitalise on this capacity will be to continue to run a production horticulture training program even after the staff needs of this farm have been met. This function will be closely related to consultancy work, farm visits and farmer to farmer training network development. We would also like to develop a close working relationship with Cardiff University, to support and be supported by research into sustainable farming practices.

Open Source Technology
Another core part of what we would ultimately like to be involved in is the development of open source technologies for ecologically sustainable farming systems. We are already involved in an open source horticultural robotics project, and will seek to integrate this into our equipment acquisition plan from the early stages. This will be a small part of what we do at first, but we expect the manufacturing of specialist equipment and providing consultancy, training and engineering services to farmers that want to take advantage of these innovations to develop into a significant business.

Community farm
Building community engagement, and working to shift food culture and the connection of people to the land, will continue to be part of what we do. We anticipate making a relatively small plot of land available on our farm for recreational horticulture and care farming work early on. This could grow to quite a few acres (perhaps as much as 10% of the site) and have little impact on the commercial horticulture operation. Through hosting school groups, parol service, prescription gardening, and the like, this venture should be able to attract its own funding, and develop the relationships to support the development of other school and community farms. The commercial farming project can support this venture by selling plugs, soil amendments, horticultural training and contract work as required. People who work in the community garden will also be able to test horticultural methods and systems at a small scale, and produce information that can then inform the development of the commercial production system.

Summary
The range of possible developments is staggering. On site we could develop bees, mushroom production, countless food processing ventures, or we could seek to buy and develop a high street property into a local food supermarket. We might seek to buy or rent more land for livestock, arable or perennial crop production, or invest in sustainable sea farming operations. We could invest in food processing or catering businesses. How this organisation develops will depend on the inclinations of the people that get involved and the available opportunities. If we are successful as a large peri-urban market garden, we will be open for further community shareholder investment, and we will seek to use this to support the establishment of new ventures to support the exponential growth of a sustainable welsh food system.

Strategic Goals
Ultimately, we would like to have an open community share offer campaign, to facilitate significant investment in the Welsh sustainable food system. Working with others, we would like the project to ultimately include: local food supermarkets in a number of towns and cities; community growing, school and care farming projects; significant land holdings with commercial farming operations spanning all agricultural sectors; horticulture, arable, livestock, soft fruit, top fruit, mushroom production, sea farming, food storage, distribution and processing infrastructure; engineering services; compost production; plant nurseries; consultancy services; equipment hire; R&D projects to test and develop innovative production systems and equipment; or any of a variety of other businesses and services that support the growth of a sustainable local food system in Wales. We get there by capturing significant local market share from the supermarket system. To achieve this, we need massive public support from the urban customer community, and we need to engage with and support the existing community of farmers with viable business alternatives.

Financial Summary
The property is likely to cost ~£500,000. Given that it is bare land, we would not want to take on this property with significantly less than £80,000 to invest in infrastructure and equipment. This is how we arrive at our minimum raise of £580,000. We (Holly Tomlinson and Jonathan Hughes) currently have ~£60,000 to invest into this venture, and some interest from family members to invest in shares that might add up to an additional £20,000. From our conversation with Triodos, to be considered for a farm business loan we would need at least a 30% (loan to value) deposit, meaning that we need to exceed £150,000 before we can realistically take the property off the market.

Next steps

 * 1) Somerset coop’s have indicated that they would be happy to send this project to their list of coop angel investors, but that they need to see a more developed business plan.
 * 2) Registering, most likely as a Community Benefit Society, perhaps with the somerset multistakeholder rules.
 * 3) Getting a board of directors and the beginning of a working team together, and getting everyones bios together and in the business plan.
 * 4) Market research. We could do with getting a website, social media presence etc set up, and designing a physical flier. All this work should be sending people to our online survey below.
 * 5) The spreadsheet needs a lot of work.
 * 6) The welsh translations need professional attention.

Links
Spreadsheet

Garddfarchnad Gymynedol Caerdydd

English survey

https://docs.google.com/forms/d/e/1FAIpQLSeb3m4Q_op9oTvzYc5nlmEQQqyWslqJ-GWCChwd4o67LtLy6A/viewform?usp=sf_link

Welsh survey

https://docs.google.com/forms/d/e/1FAIpQLSeQBmf2Yv6zto26lxhmFcntDuAmURxj8noIAE3hWM0EGfIEcA/viewform?usp=sf_link

Welsh version of this document

Garddfarchnad Gymunedol Caerdydd